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July 18, 2013 11:07 AM UTC

New Capitol Geothermal HVAC? Thank The "Failed Stimulus!"

  • 12 Comments
  • by: Colorado Pols

As the Denver Post's Howard Pankratz reports:

The new geothermal heating and cooling system at the Colorado state Capitol, consisting of water pumped from two wells drilled into the Arapahoe Aquifer more than 850 feet underground, is being brought on line this week and should bring hefty savings on utility bills for the Capitol, officials said Wednesday…

7NEWS adds some more detail about this innovative system, set to make the Colorado Capitol the first Leadership in Energy and Environmental Design (LEED)-certified state capitol in the nation:

The building was in need of replacing its current heating and cooling system, [project manager Lance] Shepherd said. Parts of the system were almost 70 years old. Due in large part to a $4.1 million federal grant from the Department of Energy, [Pols emphasis] Colorado was able to install the geothermal system for a price that was just $500,000 more than replacing the system with a traditional HVAC system.

Shepherd said the energy savings will more than pay off that difference. He said the cost savings is anticipated at more than $100,000 in the first year and at $160,000 annually by year 15…

Colorado will become the second state with a geothermal powered Capitol. Idaho is the first with a geologically-active geothermal system.

Well, folks, we looked into that $4 million grant from the federal Department of Energy to the Colorado Department of Personnel and Administration. The grant was awarded in January of 2010, from funds provided by the American Recovery and Reinvestment Act. The project is listed as "more than 50% complete," which should be updated to simply "complete" sometime soon.

Republicans have moved on from discussion of the "stimulus bill" of 2009, presumably confident that they have attached the word "failed" to the word "stimulus" well enough to ensure that is how the ARRA will go down in history. All the while, the overwhelming majority of investments in the stimulus bill quietly fulfilled their purpose: building roads and bridges, fixing up schools, and keeping benefits flowing to millions of unemployed workers. And along the way, the Colorado capitol got a grant to upgrade to a slick new geothermal heating and cooling system–an investment that will pay for itself, starting at $100,000 per year saved and adjusting upward with inflation.

Come to think of it, this really doesn't seem like a "failure" at all.

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12 thoughts on “New Capitol Geothermal HVAC? Thank The “Failed Stimulus!””

  1. Failed project, failed stimulus, failed spin. A boondoggle:

    http://coloradopeakpolitics.com/2013/07/18/steaming-pile-new-geothermal-capitol-to-attract-businesses/

    In a 2010 article about the new system, it was revealed that new system would cost $6 million and was scheduled to be completed in the Spring of 2011.  It’s two years past it’s original timeline, which sounds about right for a government construction project.  While today’s announcement didn’t reveal the final price tag, it did boast of savings of over $100,000 per year and three percent additional savings per year on top of that.

    So, in case you aren’t following, the government spent $6 million to save $100,000 and some change per year.  At that rate, it will take decades to make up the cost.  The lifespan of this technology hasn’t been revealed, so it’s unclear if this new system will ever pay for itself.

    1. ROFLMAO…. Couldn't find a legitimate analysis, could you? Well, just as tobacco companies had their own scientists telling us smoking was healthy, we have the GOP and their toadies spreading their disinformation and lies too.

    3. Shepherd said the energy savings will more than pay off that difference. He said the cost savings is anticipated at more than $100,000 in the first year and at $160,000 annually by year 15… – See more at: http://coloradopols.com/diary/45894/new-capitol-geothermal-hvac-thank-the-failed-stimulus#sthash.tDizDhZL.dpuf

      Gosh, does that mean the savings might cause some O&G execs to get slightly smaller annual bonuses?

      Even worse, does that mean we're directly contributing to world overpopulation by not killing enough people from pollution?

  2. ArapaGOP raises a fair point (boy it hurts to say that). Reading the article it sounds like this system was 4.6 million more than buying a conventional system (4.1 grant plus 500K more in state funds). In return it saves 100K/year.

    That will never pay off if you factor interest into the equation. Now if we had a carbon tax, then maybe…

    2. Two points in rebuttal:

      First, I think you misread the numbers. Through use of the grant, the project only cost $500,000 more than a conventional system. I.e. the conventional system would have cost the same $4.1m plus whatever the state put in, minus $500,000 extra for the geothermal system. The grant helped save costs by frontloading construction funding and eliminating the need for bond interest, not by reducing the "cost" of the project directly.

      Second: $100k per year plus 3 percent per annum over evan a 40 year life span is… $4.2 million, plus interest on savings… That sounds like it pays off to me.

      1. Could be, the way that's written it could be either way. But I think that's a weird phrasing if the 500K more is irrespective of the grant.

        as to the 100K making up,for the overage, you have to count interest on 4.6M (if that's the extra) paid down at 100K/year. That will never be paid off.

  3. It's "only" $500k more – that's the key phrase. If the state had come up with that $4.1m on its own, it would have had to do so through bonds, or over an extended period of time. That would have been either an interest payment, or a longer construction rollout, both of which cost money. So instead of perhaps $1m in extra costs, it's only $500k extra.

    This savings via frontloading of costs has been often cited with stimulus fund projects. It's almost boilerplate language used when promoting construction stimulus spending from the ARA.

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